FINANCIAL MANAGEMENT

Name: Rudil Luna. Agcol

FINANCIAL LECTURE 06

In this lecture 06 I learned about what really Financial economic is and what is Financial Markets. So
when we say Financial Markets, it a market where financial Instruments are trade. It is a place where
people buy and sell financial Instruments.Stocks are considered financial assets rather than physical
assets. It is possible to convert financial assets into cash with relative ease... Liquid assets are assets
that can be easily converted into cash when necessary. Properties such as real estate and plant
equipment, which cannot be easily converted into cash, are referred to as physical assets. In
addition, I learned that paper assets in investments are literally pieces of paper that define ownership
of an asset in the real world. Stocks, currencies, bonds, money market accounts, and other similar
types of investments are classic examples of paper assets that can be used for investment purposes.
When compared to hard assets, paper assets are a distinct entity. Counterparty risk is what it is all
about, to put it simply. Counterparty risk refers to the possibility that the other party in an
investment, credit, or trading transaction will fail to fulfill its obligations under the terms of the
agreement and will default on the contractual obligations in question. Aside from that, I gained some
new insights into what stocks are in layman's terms. Moreover, when we talk about bonds, it is a
debt, and currency is a Financial Instrument that is issued by a bank. Domestic households,
businesses, governments, and foreigners with excess funds (i.e., revenues exceeding expenditures)
are examples of lenders or savers. The financial system also facilitates the connection between risk-
averse entities such as hedgers and risk-loving entities such as speculators. Banks perform the
function of financial intermediaries because they act as a link between savers and lenders. Savings
accounts are established with banks, and then interest payments are received and money is
withdrawn. Borrowers receive loans from financial institutions and are required to repay the loans
with interest.

This chapter is also all about financial markets and instruments, and it contains a very informative
lesson that we can learn from this lecture, and I can say that I gained a great deal of knowledge
during the course of this chapter.
FINANCIAL MANAGEMENT

Name: Rudil Luna. Agcol

FINANCIAL MANAFY LECTURE 07

After watching the video, I would say that it has a lot of info that we can get about . Hence this topic
is a very interesting to watch, in this video I learned that The Money Market versus the Capital
Market: Both Money Markets and Capital Markets are components of Financial market where buyers
and sellers meet to trade financial securities.

• A Money Market is a type of Financial Market where securities are exchanged for a very short
period of time (generally a year). There is limited risk and potentially more rewarding than Capital
Market.

• A Capital Market on the other hand, is a type of Financial Market where securities are exchanged
for a longer period of time (usuallly more than a year). It involves greater risk and greater return.

I also learned the DIFFERENCE BETWEEN PRIMARY AND SECONDARY MARKET: There are a lot of
difference between Primary and Secondary Market. They are enumerated in the form of a table:

BASIS OF DIFFERENCE Primary Market Secondary Market

Meaning It is a type of financial It is a type of financial

market where securities are market where securities are
traded generally for a very traded for a longer period
short period of time. of time.

NATURE OF MARKET Generally, informal in It is a formal market.

nature.

Liquidity These are higly liquid. Capital market are relatively

less liquid.

Risk It has low risk. These are more riskier than

money market.

Maturity These instruments mature It takes longer period to

within a year mature.

Investors involved These instuments are Underwriters,

mainly traded Commercial
Stock Brokers, Insurance
Banks, Non- Banking
Companies, Large
Financial Institutions, etc.
Commercial Banks, etc are
usually involved in Capital
Markets.
FINANCIAL MANAGEMENT

Name: Rudil Luna. Agcol

FINANCIAL MANAGEMENT LECTURE 08

In this lecture which cover about negotiable, negotiable instrument, negotiable CD, CD, certificate of
deposit, term security, time deposit, large denomination, bearer instrument, Reg Q, interest-rate
ceiling, commercial paper. I learned so many things about it and that first and foremost I learned
that Negotiate of deposit is all about a deposit at a depository institution which is also a commercial
bank. The professor also signifies what is commercial paper and by that Commercial paper is
Commercial paper is an unsecured promise to pay a certain amount on a stated maturity date, issued
in bearer form. CP enables corporations to raise short-term funds directly from end investors through
their own in-house CP sales team or via arranged placing through bank dealers. In simple meaning
also when we say bankers acceptance, it is all about a financial instrument that represents a bank's
promise to make a future payment. Bank accepts and ensures payment as a time draft to be drawn
on a deposit, which is guaranteed by the bank. The draft specifies the amount of funds to be paid,
the date on which the payment is to be made, and the entity that is owed the funds. Overall this
chapter tackles the following lesson: negotiable, negotiable instrument, negotiable CD, CD, certificate
of deposit, term security, time deposit, large denomination, bearer instrument, Reg Q, interest-rate
ceiling, commercial paper, discount instrument, direct placement, credit line, line of credit, backup
line of credit, non-depository institution, asset-backed commercial paper, ABCP, sponsor, banker's
acceptance.
FINANCIAL MANAGEMENT

Name: Rudil Luna. Agcol

FINANCIAL LECTURE 09

Here in Lecture 9 I learned that capital market is also part of Financial Instruments.Markets in capital
goods are financial markets that bring buyers and sellers together in order to trade securities such as
stocks, bonds, currencies, and other financial assets. The stock market and the bond market are both
examples of capital markets. They assist people with business ideas in becoming entrepreneurs and
in growing small businesses into large corporations. Mutual funds, treasury bonds, private sector
bonds, stocks, private sector bills, asset-guaranteed securities, asset-backed securities, options, lease
certificates, and futures contract instruments are all examples of capital markets instruments that are
used in the financial markets. Furthermore, the topics that were discussed by the professor included
Treasury notes and bonds, which are, in layman's terms, securities that pay a fixed rate of interest
every six months until the security matures, at which point the Treasury pays the security's par value.
The only difference between them is the amount of time they have until they reach maturity.
Treasury notes have a maturity date that is more than a year away, but not more than ten years
from the date of issue.After that, he discusses Financial Markets, which are defined as any location or
system that allows buyers and sellers to trade financial instruments such as bonds, stocks, various
international currencies, and derivatives, among other things. In addition, financial markets facilitate
the interaction between those who require capital and those who have capital to invest, and recent
trends in financial markets include: (1) technological advancements, such as computerization; (2)
globalization and interdependence; contagion, such as financial contagion; and (3) globalization and
interdependence. deregulation, (4) competition, (5) complexity, complex markets, complex
instruments, (6) financial innovation, (7) fast markets, (8) financial conglomerates, financial
supermarkets, (9) derivatives, leverage, financial risk, (10) speculation, speculative bubbles,
leveraged speculation, and so on. Overall, this is a topic that is both interesting and enjoyable to
study. It assists me in achieving the highest level of knowledge possible, and for this, I would like to
express my appreciation to the lecturer as well.